High unemployment rates prompt stocks from the Philippines to plummet towards its biggest loss since September 2011. The nation's unemployment rates headed for its highest in three years, while exports contracted increased.
The Philippines Stock Exchange Index (PCOMP) ended its rally which started Friday after it fell 4.6 percent to 6,556.65 in Manila at the close. Valuations dropped while 30-day volatility rose to six-month high 27.9.
Unemployment data reported an increase to 7.5 percent within the last three months, said the National Statistics Office of the Philippines. Exports dropped as well to a 12.8 percent in April.
"The high unemployment rate casts a shadow of doubt on the strength of economic growth and its sustainability,"says John Ravelas of BDO Unibank based in the country's capital. "Whether the perception is right or wrong, it raises questions. The exports data highlights the world economy remains fragile," he added.
The Asian nation posted an impressive gross domestic product growth. Official forecasts say that the growth will continue up to 6 to 7 percent this year.
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